Viral Product Management

Our previous article looked at the economics of a Freemium business model. One element that is key to making a strategy that involves “free” work financially is growing your user base. One way to get that growth is through a word-of-mouth marketing campaign. This article looks at different elements that characterize or affect the successfulness of a viral product – from a product management perspective.

Word of Mouth

We wrote about the dynamics of how to maximize your word of mouth a couple years ago. Essentially, you create a product and a situation where people want to tell other people about your product. Ideally, your customers (free or otherwise) will like your product so much that they want other people to use it – not just know about it. Word of mouth is a double-edged sword however, so you have to be careful about the propagation of bad word of mouth too.

Word of Mouth Marketing

People in marketing, PR, and corporate communications talk a lot about viral marketing. Viral marketing is when you create a message that is implicitly viral, causing exposure for your product. This is different than viral product management, which is when you create a product that is self-promoting with similar dynamics to a viral marketing campaign. A great example of a viral message is the Mentos / Diet Coke videos.

But this phenomenon was viral because of the message, not because of the product. This article focuses on product management – the things we do to make a product self-propagate, not the explicit marketing we do to get awareness. You can think of the product management as implicit marketing – a feature or capability may have a direct impact on your word-of-mouth.

Word of Mouth Product Management

As a product manager, when you need or want a viral vector by which you grow your customer base, you can either rely on word-of-mouth marketing (see above) or focus on making product management decisions that encourage the same communication dynamics (see below). At a high level, you simply need to create a product that your customers want other people to start using, but they have to want it “enough.”

This presentation is an analysis of the economics of publishing an iPhone application as a for-a-fee product, or as an advertiser-supported product. [Hat tip to Andrew Chen.] What is most relevant to viral product management is the graph on slide 26.

What the graph shows is that the top 10% of ad-supported applications break away from the other 90% in terms of usage. The reason (in that presentation) for looking at the data was for measuring the CPM (cost per thousand impressions) based revenue for applications, in comparison with the charge-for-the-application model. At the end of the day, the free version makes sense, but only for the top 5% of applications, according to Pinch Media. For the rest of the field, a for-a-fee application will probably generate more revenue.

What is glaring in that data is that the applications in the top 10% (the discrete red line at the top of the graph) are not the same as the other applications. Something is different that causes users to want to use those applications a lot more. As a product manager, I believe that those applications have crossed the suck threshold. In other words – they are a pleasure to use. What Pinch Media’s data also does not show is how viral the applications are. In other words – do the top 10% (in repeat usage per user) applications also have the fastest growth (in user count), and if so, is it by word of mouth.

My premise is that the applications that are most pleasurable to use are the ones that can achieve viral growth. These are the applications that you want to tell other people about.

One of the dangers of this incremental product growth strategies is that you catch a case of featuritis. Very rarely will you hear people clamoring to remove features from your product. You’re more likely to hear a steady stream of “one more thing” requests. Too many features can make it hard for people to learn how to use your product. There’s a threshold of user tolerance for features. Too few or too many features, and your product will be unpleasent to use. Above that limit, the product is a pleasure to use. Kathy Sierra coined the term suck threshold, to mark this delineation.

The following diagrams are from an earlier article on featuritis, and build on some great ideas from Kathy Sierra. These focus on the holistic “how good is your product, from a user perspective” question, and take a Kano-analysis approach to looking at ways to improve your product.

You can improve the curve for any particular product by improving the user’s experience with “more is better” features. You can either improve usability or performance (or both) and change the shape of the curve above.

Given the above dynamics, and Malcolm Gladwell’s concept of a Tipping Point, where things discontinuously change, there will also be some threshold by which your product is so pleasurable to use, that people will feel compelled to share it.

Since 90% of the applications didn’t appear to tip in Pinch Media’s analysis, I’ll show the default tipping point as being out of reach – at least until you do something about it.

Two Modes of Viral Product Propagation

There are two primary human-nature mechanisms by which a product will propagate virally – altruishm and selfishness.

Altruism – You should use this product because I love it and you will too.

Selfishness – You should use this product because If you use it too, it will be better for me.

If your product falls below the suck threshold, I don’t believe you can sustain any form of viral growth. Sharing a product recommendation builds on trust, so sharing something that people won’t like will erode that trust. I believe this is a self-correcting behavior, and what little sharing may occur will be short lived. A product that gets shared because of altruism needs to not only be better than good, it has to be so good that you’ll go out of your way to tell people about it – with no expected benefit for yourself. [Note: other than the self-reinforcing positive feeling you get from being altruistic.]

Leveraging Altruism as Viral Mechanism

Altruism is an interesting viral dynamic. If you make your product so good that people feel compelled to tell their friends about it (or blog or tweet about it), you’ve got a great product. Product management decisions to achieve this are easy in that you only have to make the product fantastic for your users. At the same time, your product management decisions are difficult, because you have to make your product good enough to cross the tipping point. The iPhone, Synergy, Sherwin Williams paint (when the first local store opened in Austin, the owner was stunned by how much demand was out there), Tweetdeck (a Twitter client), and GMail are all examples of this. Additional users / customers don’t make the experience any better for the current users, but people still rave about it to their friends and associates.

Leveraging Selfishness as Viral Mechanism

The are two ways to leverage people’s inherent selfishness when developing products. The first (and harder) is to define capabilities or features for the product where the customer’s experience is better when more people use the product. Twitter (and Facebook and other social media applications) take advantage of this. If you’re using Twitter as a broadcast medium, then the more people who are out there to listen to you, the more value Twitter has to you. So you encourage people to use it. On the reverse side, if you’re looking to Twitter as a source of good information, the more people who are out there sharing information, the more valueable this channel is to you.

The second, and easier way to reward customers for encouraging other people to use your product is to explicitly reward them. Affiliate programs, finder’s fees, account credits, or other compensation can be given to existing customers, in exchange for signing up new customers. A software as a service variant of this would be a program that rewarded you with credits to your account for every customer you refer, for as long as both of your accounts are active. People can get your product for free if they encourage enough other people to sign up.

Both of these selfishness-model variants, to be sustainable, need to be leveraged to promote a product that is actually good.

The altruism model won’t work if your product is not better than good, but actually exceeds a tipping point.

Conclusion

You can create viral messages or videos that spread awareness of your product tangentially, or you can create programs that encourage people to promote your product, or you can create products that promote themselves. As product managers, if your business model relies on viral growth, you can either take ownership and create viral products, or cross your fingers and hope for viral promotions.

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27 thoughts on “Viral Product Management”

This article challenged my viral as Metcalf’s law conformant protocols and codecs. In Metcalf’s virus, a user uses the software built on the protocol, because it gates access to some content that is encoded in the protocol, and that content cannot be accessed in any other way. Codecs encode and later decode content creating islands of content, and along the way an economic geography. The application creates more value as more users use it. Viral is about the application’s underlying networks of content and users.

Metcalf’s viral comes with a technology, rather than as a feature added to a product. That technology is in the technology platform, and is intrinsic to the product. You could think of viral as being a platform unto itself. Then, again, as a platform unto itself, it could be incorporated into many products, which would just accelerate it’s viralness.

I think, in relation to this article, that is a measure of the potential value of the network implicitly, but not to the individual users, as the number of users grows – assuming there is a “network effect” that can be monetized. This still also doesn’t address the “how valuable is the network to an individual who is in the network” question…

Scott, very interesting take on viral product management. When you read about the word ‘viral’ it’s usually in the context of marketing not planning and developing. For a product to go viral (in either context), it has to be compelling, easy to use, solve problems, and ultimately delight its users. This should be the goal of every product manager. Unfortunately, many products will never be that cool, so the PMs have to do the best they can within the limits of their markets and products.

With that in mind, it should be the goal of every product manger to be so successful they will one day invent the cool product that goes viral and everybody wants to buy. With hard work and time, the goal is within reach. -Michael

Hey Michael Ray Hopkin, thanks for the comments. I completely agree that it should be the goal. This is analogous to a customer service rep who is working in a call center saying “my goal is to promote my company, not just solve this customer problem.” I personally strive for “product greatness” however that manifests in a particular domain. I think, for me, it is some blend of work-ethic and artistic-drive.

Every time a “great” product is created, it makes the world a little bit better.

In a technology adoption situation, the technology must be viral among the technical enthusiast-geeks, or you will have an uphill situation in terms of finding the early adopter-economic buyer to sponsor the intitial productization. It is the technial enthusiasts that contextualize the discovery and play in terms of the work they do. They drive uptake. It doesn’t have to be a product. Make something that constitutes a mashup game. Let the technical enthusiast/geeks make it interesting.

Hey David, I think you’re exactly right! Crossing the Chasm talks about the early adopters, and points out that they are the first consumers in any new market. And I think it was Blink (but maybe it was The Tipping Point that explains the notion of a “sneezer” – someone who shares an idea with his or her network of people.

With my current client, a start-up in Austin with a consumer SaaS offering, we explicitly developed a persona to represent our first wave of early adopters. And we’ve prioritized development of the capabilities of the product with their needs in mind. We also keep an eye on identifying the capabilities that would encourage them to promote the product to their friends. This is actually the source of inspiration for me in writing up my thoughts on viral product management.

Hey John, thanks for the great link. Really interesting to think about a transition (or choice) of how to approach the development of something that makes a product viral, while keeping current customers happy. His split between micro-niche products we love and niche/mass products that don’t annoy us is really insightful – it resonated with me. Folks should check it out (linked in John’s comment below)

Scott, when I think viral, I think network effects and Metcalf. It doesn’t surprise me that the user doesn’ think that way. Users won’t think about the broader implications of their role in a network, or their leveraging that network. They are trying to get their work done. An economic buyer might think about that. And, in my triangle model, I’ve added a distinct layer, the management layer, where you move away from the user, and deal with the extra-user considerations like workflow, process, network effects, and sideband opportunities within the customer’s organization.

I’m looking at viral with the goal of technology adoption, not so much the spread of a single product. The viral product acquires a specific population as quickly as possible. I’d even go so far as to code a variant product to acquire another distinct population. Viral happens in Moore’s bowling ally. Viral along with social network mapping happens in the chasam.

I stress network effects and the vendor capturing their increasing return. I’ve seen many vendors refuse to capture their increasing return, so yes, viral would be a hard sell to them as well.

In regards to physical networks vs. social networks, individuals are aliased by their devices. Their devices adhear to Metcalf. It is their devices that increase in value with the spread of the device.

The reach of a social network depends on gateways between communications channels as much as it depends on devices. If you use EM, and I use email, we won’t talk much. I’d have to get EM. Then, I’d have to reconfigure my communications to fit the EM mediation.

Life was never homogeneous, so why would my devices present me with a homogeneous world. Viral need not foster a homogeneous world for the user. Viral spreads the infrastructure for communications. Once spread, we communicate or not.

I know I have downloaded a lot of communications devices that I use only once. Eventually, they get uninstalled. The content was not compelling. So much for being a channel. You can work the compelling component separately from the infrastructural component. Viral is exposure. Sticky requires exposure. I’ve got to achieve the trial. Then, in the trial, I have to sell you. And, if there is only one person that you communicate with via that channel, it will be a hard sale.

Very interesting analysis. Seems like these concepts could be used by anyone that is trying to market a product, business, or idea. I stumbled upon this site by accident…just looking for ideas about how we could create excitement about a new initiative for “running more effective meetings.” This is boring topic, and I was trying to figure out how we could do something different…create a buzz. So, I’m not really looking at marketing a product, just an idea. I like the way this article splits out the motivations of altruism or selfishness in how the word gets out.

I think once the word does get out and people here that “everyone’s using it” the popularity of a product ends up being incentive for many. People want to find out what all the fuss is about.

I think you’re right about the popularity angle. I considered adding “conformity” as a third viral vector. Ultimately, I decided not to include it in the article, because it didn’t feel like a vector that we can design products to influence. It feels more like a context. But I agree with you. I think this is probably like men wearing Levi’s blue jeans in the north east and south, or wearing Wranglers in the western United States. It would be interesting to see how the market share numbers for blue jeans vary by geography.

Please let us know if you come up with a way to drive your initiative virally using the “viral product management” approach (versus viral marketing). Would love to hear about what you try, and how it works for you!

@sehlhorst on Twitter

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